Shares of Yelp YELP are up three percent to $64.90 in Wednesday's pre-market trading after being upgraded by Citigroup from Neutral to Buy.
Analyst Mark May's upgrade is based on five reasons:
Market News and Data brought to you by Benzinga APIs- Recent technical pullback “creates a buying opportunity.”
- Confident in near to long-term forecasts, and increased out-year estimates due to new total addressable market (TAM).
- Yelp is “early in penetrating its “serviceable TAM and, thus, can generate a 32% revenue CAGR over the next five years.”
- May estimates a 56% 5-year adjusted earnings per share CAGR given “TAM/revenue outlook combined with the inherent margins of the business model.”
- Yelp has strong strategic position in mobile and local Internet, an increasingly important segment.
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